IBM to Acquire Varicent to Broaden its Analytics Portfolio

IBM has announced a definitive agreement to acquire Varicent Software (Toronto), a provider of analytics software for compensation and sales performance management. IBM declined to comment on the terms of agreement to acquire the privately held company.

Varicent software automates and analyzes the collection and reporting of sales data across finance, sales, human resources and IT departments to gain efficiencies, uncover trends and improve sales performance, according to an IBM statement. IBM characterizes the acquisition as accelerating the vendor's Smarter Analytics capabilities across line-of-business operations in all industries. Varicent's assets will be combined with IBM's existing software offerings that are delivered to clients through on-premise or cloud computing models, according to IBM.

"The acquisition of Varicent advances IBM's efforts to drive analytics capabilities into the hands of front line employees to transform business operations and ultimately improve the bottom line," comments Les Rechan, general manager, business analytics, IBM. "For the thousands of sales organizations still relying on silos of data, spreadsheets and e-mail to manage sales, there is an enormous opportunity to apply analytics to this vital area of business and uncover new, untapped growth opportunities."

"Sales Performance Management is still viewed by many in the industry as an art versus a science, but there is plenty of opportunity for this mind set to change," says Dan Shimmerman, president and CEO, Varicent. "As part of IBM, we can now bring our technological expertise in maturing and advancing the efficiency and effectiveness of the sales function to a broader range of clients across the globe who are looking to improve their processes, and strategically align incentive compensation with profitable growth."

Founded in 2003, Varicent has more than 180 customers using its software, including: Farmers, Starwood Hotels, Covidien, Dex One, Manpower, Hertz, and Office Depot. Its software automates and integrates all aspects of the otherwise labor-intensive activities related to sales, client and financial performance management across the enterprises, says IBM.

Varicent improves upon earlier tools by providing a single management system that relies on a sophisticated calculation engine to model and analyze the effectiveness of incentive spend, IBM claims. The software allows clients such as banks, insurance companies, retailers, information technology and telecommunications providers to more accurately determine compensation, streamline territory assignments, manage quotas, and report and analyze sales activities, according to the vendor. Varicent also strengthens audit and compliance readiness and provides transparency for all aspects of incentive compensation, IBM asserts.

IBM reports that it will combine Varicent with its R&D and prior acquisitions including Algorithmics, Clarity Systems, OpenPages, Cognos and SPSS, to expand IBM capabilities in business analytics and optimization across finance, sales, and customer service operations. The vendor places these acquisitions within what it calls IBM's larger focus on analytics, which spans hardware, software, services and research.